3 Min Read
* TSX rises 1.07 percent to 10,814.79
* Firm commodity prices lift materials, energy
* Fed, U.S. existing home data boost sentiment (Adds details)
By Ka Yan Ng
TORONTO, Aug 21 (Reuters) - Toronto's main stock index drove higher on Friday as risk appetite gained momentum with an upbeat read of U.S. home sales data and stronger prices for key commodities such as gold and oil.
Better than expected sales of previously owned U.S. homes in July, which also recorded their fastest pace in nearly two years, were the strongest sign yet that the U.S. housing market was pulling out of a three-year slump. [ID:nNYZ000483]
A further lift came after U.S. Federal Reserve Chairman Ben Bernanke said the global economy appears to be on the mend after a deep downturn, but he cautioned the recovery is likely to be sluggish and risks remain. [ID:nWEQ001325]
At 10:33 a.m. (1433 GMT), the S&P/TSX composite index .GSPTSE was up 114.28 points, or 1.07 percent, at 10,814.79, as it approached its highest level of the week. All 10 groups were higher.
"The U.S. is leading us up for today," said John Kinsey, portfolio manager at Caldwell Securities Ltd.
But he noted that summer doldrums will likely create lighter volumes as August comes to a close, setting the stage for volatility.
"We may get some knee-jerk reactions to news on a daily basis, so we could have a bit of an up one day, down the next, but it will be light volume until Labor Day."
The mounting risk appetite contributed to improving commodity prices. Oil reached a high for this year above $74 a barrel, while the price of gold climbed 2 percent to a one-week high in tandem with a stronger euro.
That helped boost the energy group by 1.71 percent, while materials was up 1.66 percent.
Gold miners, which are part of the materials sector, were strong performers as well, with Goldcorp (G.TO) rising 2.2 percent to C$39.23.
The TSX's gains came on the heels of firm overseas markets, with gains by Chinese shares, which have become a yardstick of risk appetite in recent sessions. The sentiment spilled over into Europe, which got an additional boost from a strong improvement in a euro zone manufacturing and services survey.
$1=$1.08 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson